Bitcoin Mining Difficulty Might Spike on Sunday
The next adjustment of the Bitcoin mining difficulty will happen on Sunday the 6th of November. And it is expected that the difficulty will increase further. The latest information and development have recently put Bitcoin miners under a lot of pressure.
Miners are Packing Up
If the mining difficulty increases at the current expected rate, it might lead to a new all-time high. It would then be the third of such records in a row. This is according to data published and analyzed by CryptoSlate.
The Bitcoin mining difficulty has been increasing at a record-high rate for about three months. It might come as a surprise given that the mining difficulty has also seen deductions up to six times this year. But the hash rate keeps a high momentum and put miners on the edge.
Increasing mining difficulty and hash rates equally increase the competition in the mining sector. The exponential increase seen in the mining difficulty this year lead to many miners running out of business. Those who did not become bankrupt were forced to either close their facilities or sell off their assets.
Compass and Core Scientific are two examples of many Bitcoin mining firms struggling in the current state. They can’t seem to find a way out yet.
Analysts at CryptoSlate looked into the mining condition a while ago. There is no particular reason why mining difficulty and hash rate increase other than maybe when miners increase. And a couple of reasons might, in turn, be responsible for the miners’ increase.
Will It Keep Rising?
One of them is the Ethereum Merge in September. As Ethereum moved from proof-of-work to proof-of-stake, there was no need for miners anymore. It is like most of them moved directly into Bitcoin mining.
Again, a lot of Bitcoin miners ordered new mining equipment during the bull run in 2021. Some of those pieces of equipment arrived at their destinations this year and they got plugged straight into mining. That has equally significantly increased the number of miners in less than a year.
Once more, as a result of this year’s bear market, mining rigs older than 2019 became less profitable to their owners. Rig manufacturers got to work and developed cheaper rigs. The result is that a lot more investors were able to buy them and began mining, thereby sending hash rates higher.
These are just a few factors responsible for the mining difficulty hike. These factors are a trend and not a single event, it is therefore not known if the mining difficulty will keep increasing or not.
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